What’s your payment

[Onebigyoshi]

Or the market could go down 10 percent 2 years in a row and in 5 years you still aren’t back to even. Then your math looks very very different. There are no investments that offer a risk free 7% rate of return. We have been in a 10 year bull market, the longest in history, history is not on the side of this continuing for the next 5 years. You are correct that over time if you purchased a new vehicle every year for ever and ever it would average out in your favor. Regardless if it’s $27k, $17k, or $7k that doesn’t move our needle over 5 years.

Absolutely you're right, but historically market return has been around 7~10% return. Of course there are always risk in investing, no doubt. In no way I was trying to convince anyone to start investing. As matter of fact, if you're scared of losing tens, hundreds, thousands, millions definitely stay away from it. I was only showing the upside to investing, and of course with pretty much anything in life there are downsides, like your scenario. I spend a small amount of time thinking the downsides/negatives, but instead focus more on the upside/opportunities. When it comes to investing the market, I like my odds there. If the market goes down 10%, great I welcome it just as much if it went up 10%. Back to the point of 5 years, yes you're right the needle might not move that much, but it also could. You have to make that choice yourself.

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[e36racer]

I wasn't trying to incite a debate about investing, just stating that I don't pay cash in full for cars because car loan interest rates are so low these days. Yes, investing in the market is risky and your are not always on the upswing. But the way I justify living with a car payment is I look at the delta in rates between my loan and investments as an offset to the car's depreciation. Especially with what cars cost these days, the fact that the depreciation on a car is probably about 40-50% after 4 years. That's a big chunk of scratch.

 

[Slapping_Rabbits]

Ugh. I got a good interest rate of 2.49% and my payment is, and i'm not messing with you, $666. Its pretty incredible. I think the catholic side of the family was really bothered by this.

 

[rvillano8188]

Great question, and you are 100% correct that the math doesn't lie that it makes more sense to use cheap money. The answer for us personally is that once you achieve financial independence, (your passive income alone exceeds your annual expenses in good years and bad, not unrealized market gains) you start to value simplifying your life. Chasing 3-5% return over interest paid on a car note on $50k doesn't move the needle or change our lives in anyway, but not having to think about owning somebody $ does bring happiness. If you are still in the nest egg building phase or are trying to maximize every last dollar then absolutely use other people's money, but once you've built the wealth it's nice to live debt free. Just my $0.02

This is absolutely one of the most respectable answers i could’ve heard. Piece (peace?) of mind is invaluable so I applaud you for even attempting to give it value.

On another note, if you pay for the vehicle and then invest the $900 per month for the next 5 years with dollar cost averaging you could make more in interest than leaving $50,000 in an investment. Unless you are in a fixed interest investment (which you can't find one making 7% right now), you could lose value the first year, then only get interest on the lower value for the next, etc. Bottom line is, if you have the cash, either way has virtually the same potential....
And if you invest the $50,000 and need to withdraw the $900 for the payment each month, you'll only have $6,000 left after 5 years if you are making a steady 7% compounded monthly, which is unlikely. So you aren't making $17,200 interest on that $50,000......

This was a close 2nd. Listen, not everyone is motivated by money, but as someone who had a wealthy upbringing, then lost everything, then built myself up again to modest means, sometimes it’s bigger than you. Even if your financially independent, and happy, and don’t need more, you could be utilizing those extra funds toward philanthropy and helping others. I’ve always believed there’s enough for me, but not enough for others. Not saying you don’t do that already, but there are good people always less fortunate than you who need a guardian angel sometimes.

 

[OL1970]

There is no reward without risk! Thank the baby Jesus we all love Jeeps here : )

 

[Lex Low]

Cash purchase, so $0

 

[pparks72]

My family has been debt free since 2004, so I also took the easy route an opted for a cash payoff on delivery.

 

[Gren71]

$16k trade in from JKU
$7,500 down
+ warranty to 120,000miles
Financed 72 months @ %3.5 ish (cant remember exactly)

$400.08/month

would have been $356 without the warranty.

 

[Skip The Road]

O

 

[lookitsadam]

I don't have my final numbers yet but I'll be around $250 a month.
$30k trade in plus an extra $5k down.

 

[Murgatroid]

I’ll bring the average down a bit: $0 monthly payment

Mine is also $0 or maybe I should say they vary, last month it cost me 600 for rims, Month before that it was seat covers, before that it was graphics...

 

[Bob502000]

I just read an article in Car and Driver regarding the average monthly automobile payment: $550.00. Of course this made me curious about the average Gladiator monthly payment. I know we just met and all, but.... what is your monthly payment? Length of Loan or Lease? I haven’t pulled the trigger yet but mine will be $405.00 to buy a Rubicon.

https://www.caranddriver.com/news/a29338445/auto-loans-expensive-longer/

614 a month untill I die of old age.

 

[surge101]

25k Down
18k Financed at 6.6% (First time financing a car)
75 Months at 300

 

[noside85]

Ugh. I got a good interest rate of 2.49% and my payment is, and i'm not messing with you, $666. Its pretty incredible. I think the catholic side of the family was really bothered by this.

Mine is a lease (4yr, 12k) at the same price...

 

[K9Jeeper]

Did a lease. Payment came in $10 less than what you see on Jeep.com advertised, so $319, but I also got a Sport S with $1800 more MSRP than the example used on Jeep.com. All in all, great deal in my books.

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